Working Tax Credit

Working Tax Credit is designed to top up your earnings if you work and you’re on a low income. Use this guide to find out whether you’re eligible for the benefit, what the income thresholds are, how much you’re entitled to and how to claim.

Use the Working Tax Credit Calculator

The amount you get for each element depends on things like:

Your income

How many hours you work

Whether you have a disability

Whether you have children

Whether you pay for childcare

For example, if your annual household income is £6,420 or below, you’ll get the maximum amount for each Working Tax Credit element you qualify for. This is called the ‘income threshold’ - anything you earn above that will reduce the amount you can get.

How to claim Working Tax Credit

Keeping your tax credits up to date

You need to renew your tax credits claim every year if you want to keep getting them.

The Tax Credits Office will write to you to telling you what you need to do to renew your tax credits.

If your circumstances change at any time during the year (for example, if your income changes, your child leaves home or you move house), you should call the Tax Credit Office on 0345 300 3900 to let them know.

Changes in your circumstances can affect the amount of money you should be getting. For example, if your income drops, you may get more support. Or if your income increases, you could have to pay back any money you’ve been overpaid at a later date if you don’t let the Tax Credits Office know.

Tax credits and income changes

From April 2016, the amount by which your income can change before you have to tell the Tax Credit Office falls from £5,000 to £2,500. This is called the income disregard.

If your income goes up by £2,500 or more and you delay telling the Tax Credit Office or wait until the next time your claim is due to be re-assessed, you may find that you have been overpaid tax credits.

You will be asked to pay this extra money back, either by reducing your future tax credits or by direct payments if your tax credits have stopped.

To avoid a bill, it’s even more important to tell the Tax Credit Office within 30 days of when you get the extra money. It’ll be easier for your tax credits to be adjusted, and decrease the chance you’ll be chased for overpayments at a later date.

It also works the other way. If your income falls by £2,500 or more, you might be entitled to more tax credits.

If you are asked to repay tax credits and will struggle to pay, speak to the Tax Credit Office as soon as you can, and certainly within 30 days.

Find out more about what to do if you are overpaid tax credits on the GOV.UK websiteopens in new window

Other tax credits you might qualify for

If you have children and you’re on a low income, you might also be eligible for Child Tax Credit.

When you apply for Working Tax Credit, you’ll also be told whether you qualify for Child Tax Credit. There’s no need to claim them separately.

Working Tax Credit and Universal Credit

Working Tax Credit is one of the six benefits being phased out and gradually replaced by Universal Credit.

If you’re already claiming Working Tax Credit you probably won’t be affected right now.

Until you’re asked to make a claim for Universal Credit, you can continue to make new claims for tax credits.

At the moment, you would only need to claim Universal Credit instead of tax credits if:

You start living with a partner who already receives Universal Credit

You live in one of the areas where Universal Credit is being introduced and you lose your job

You can’t claim tax credits and Universal Credit at the same time. If you’re affected by Universal Credit, the Tax Credit Office will tell you what you need to do to close your Working Tax Credit claim.